Brazil-More beef for Russia.

BRAZIL-FAVORABLE TERMS WORKED OUT WITH RUSSIA FOR BEEF EXPORTS.

This has been announced by a Brazilian agriculture ministry official said on Wednesday, and the Latin American nation may reciprocate with bigger wheat imports.

Celio Porto, foreign relations secretary at the Brazilian agriculture ministry who was in Moscow earlier this week, said Russia was reviewing its beef import quotas as the European Union had not supplied its allotted quantity.

"This favours Brazil. The Russians said it is also probable they may do something with pork," said Porto. "We are more optimistic, but in concrete terms they have announced nothing about the redistribution of the beef quota."

Asked if Russia expected Brazil to import more wheat, now brimming in Russian silos, in exchange for greater access to its meat market, Porto said: "At no time did they set this condition. We are offering this as a gesture of good faith."

Brazil’s wheat milling association Abitrigo is lobbying the government to drop the 10 percent import tariff on wheat from outside the Mercosur trade bloc due to the shortfall in output from Argentina, which usually supplies almost all of Brazil’s wheat import needs.

Porto said the government is negotiating a "gentleman’s agreement" with the milling sector to purchase some cargoes of Russian wheat.

"We agree that we should drop the tariff for a certain quota of wheat, though we would like there to be a commitment by the mills to import a certain quantity of Russian wheat. They prefer US and Canadian but we think this gesture of good faith is important," Porto said from Peking where he is hoping to secure a foothold for Brazilian meat imports to China.

A representative of Abitrigo, which has requested a 1.5 million tonne tariff-free import quota from the government, was in Moscow for the talks this week, Porto said.

After discussions with the state company that manages Russian wheat stocks and exports, Porto said Russia would be restricted in the quantities of wheat it could ship to Brazil because of limited spare logistical capacity at its end.

"They made it understood that it would be difficult ... in three months. The maximum they could manage to ship to Brazil would be 200,000 tonnes," said Porto.

Local millers reported in March that Bunge had purchased 25,000 tonnes of Russian hard wheat for May delivery to a north-eastern port.

Before the Brazilian Trade Chamber is expected to decide on lowering the tariff on April 28, the government is expected to meet with the milling sector.

Brazil is the world’s largest exporter of beef and poultry and a major exporter of pork. It is also often the world’s largest importer of wheat.